ED Must First Prove FERA Violation Before Shifting Burden Of Proof To Accused: Delhi High Court

The Delhi High Court has ruled that the Enforcement Directorate must first establish that a person committed an act requiring permission under the Foreign Exchange Regulation Act (FERA) before the burden shifts to that person to prove they had the requisite permission.A Division Bench of Justice Navin Chawla and Justice Ravinder Dudeja held that the Department had failed to prove that Laxman T. Advani had dealt in foreign currency. The court dismissed the Union government's appeal against the...

Karnataka High Court Dismisses Genpact's Challenge To ED Seizure Of Gurgaon Office Under FEMA

The Karnataka High Court has dismissed Genpact India's, a business process management and professional services company, challenge to the Enforcement Directorate's seizure of its Gurgaon head-office premises under Section 37A of the Foreign Exchange Management Act (FEMA).At the same time, the court set aside the ED's rejection of Genpact's application for a no-objection certificate (NOC) to invest $100 million in its GIFT City entity, holding that the rejection did not give adequate reasons for...

Penalty Under FERA Cannot Be Justified Merely Because It Falls Within Statutory Maximum: Delhi High Court

The Delhi High Court has held that a penalty cannot be justified merely because it falls within the statutory maximum provided under Foreign Exchange Regulation Act, 1973 (FERA). The authority imposing the penalty must give reasons for the amount imposed and ensure that it is proportionate to the contravention."We are, therefore, of the opinion that merely because the imposed penalty falls within the maximum limit prescribed under Section 50 of the FERA, does not, by itself, validate it. The...

Madras High Court Dismisses Flipkart Founders' Review Plea Against FEMA Proceedings

The Madras High Court has dismissed review petitions filed by Flipkart co-founders Sachin Bansal and Binny Bansal and three investors seeking reconsideration of an earlier order that declined to interfere with Enforcement Directorate proceedings under the Foreign Exchange Management Act (FEMA). Justice S Sounthar held that the petitioners have an effective statutory remedy under FEMA and that the issues raised by them must first be agitated before the adjudicating authority. “In view of the...

Delhi High Court Sets Aside FEMA Confiscation For Lack Of Reasons, Upholds Penalty

The Delhi High Court has set aside confiscation orders passed under the Foreign Exchange Management Act, 1999 (FEMA), holding that such action cannot be sustained in the absence of reasons.A Division Bench of Justices Navin Chawla and Ravinder Dudeja partly allowed a batch of appeals filed against orders of the Appellate Tribunal for Foreign Exchange, which had affirmed penalties as well as confiscation of funds lying in Non-Resident (Non-Repatriable) Rupee (NRNR) accounts.The case arose from...

Damages Awarded By Foreign Court Cannot Be Subject To FEMA, RBI Ceiling: Delhi High Court

The Delhi High Court on Monday held that damages awarded by a competent foreign court for breach of contract cannot be subjected to ceilings prescribed under the Foreign Exchange Management Act or RBI guidelines. “In my considered view, the amounts awarded by a competent Court, whether Indian or foreign, towards damages for breach of contract, cannot be subject to ceilings prescribed under FEMA and/or RBI directions/circulars,” Justice Amit Bansal observed while allowing execution of an English...